The economy has been hard hit by the COVID-19 virus. Output is set to shrink by 8% in 2020 before picking up in 2021 if the current outbreak is overcome and restrictions are gradually lifted from mid‑May (the single‑hit scenario). If there is a second wave of the virus later in 2020, GDP is expected to decrease by 10% and the rebound will be considerably slower (the double-hit scenario). The fall is driven by domestic demand in both scenarios, including private consumption and investments. Pent‑up consumption demand will drive the initial pick-up, with investment lagging due to spare capacity and lingering uncertainty, but output will remain below pre-crisis levels by the end of 2021 in both scenarios. Unemployment will remain well above 2019 levels throughout 2021. Automatic stabilisers and discretionary spending are supporting businesses and households, pushing the fiscal balance into deficit.